Rwanda doles out $150 million stimulus package to businesses, with aim of fast-tracking economic recovery post-pandemic

The Rwandan private sector is set to receive a $150 million stimulus package from the government aimed at fast-tracking economic recovery in the East African country.

The stimulus package will mainly benefit Rwanda's manufacturing sector

The fund would be disbursed mainly to businesses operating in the manufacturing sector. This is to help them boost output, whilst helping the country deal with soaring consumer prices and imported inflation.

Business Insider Africa understands that the money is the remaining part of a $250 million Economic Recovery Fund that was launched in the middle of last year, at the height of the pandemic. A public disclosure that was made available by the National Bank of Rwanda at the time had highlighted the main objective of the fund:

"To support businesses in the sectors hit hardest by the pandemic so they can survive, resume work/production and safeguard employment. To expand domestic production of essential goods during the COVID-19 and post-COVID-19 period (e.g. medical equipment like masks, gloves, sanitizers, disinfectants, and others that may be deemed necessary during this period)."

Many African economies, including Rwanda, are still struggling to recover from the negative economic impacts that were wrought by the COVID-19 pandemic. Unfortunately, the ongoing war in Ukraine has exacerbated the problem, as consumer prices across Sub-Saharan Africa have surged in the months since the war began; driven by high commodity and energy costs.

In view of these developments, the Rwandan Government felt this is the right time to launch the second phase of the economic recovery fund. While speaking during the launch, Prime Minister Edouard Ngirente explained how the $150 million stimulus package is expected to help the Rwanda's economy.

“The current global inflation is heavily impacting our economy…the government has invested in subsidies and attracted investors in the manufacturing sector to boost local production to reduce our dependence on imports,” he said.

Note that many African countries have also launched various stimulus initiatives ranging from grants to loans and tax rebates. However, international organisations such as The World Bank and the International Monetary Fund (IMF) have continued to call for more action in view of the challenging economic situation currently being faced by businesses and households across the continent.

This is a Business Insider Article, for more articles like this, visit africa.businessinsider.com

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